Saudi-Russian proposal to cap Oil output, which had recently boosted Oil prices, didn’t find adequate support from Iran. The country’s Oil Minister Bijan Zanganeh considered the offer as “ridiculous” and “unrealistic demand”, causing Oil bulls to massively dump their long positions. WTI tumbled by 3.23% to $30.84, Brent futures declined by 1.83% to 32.64 level as of 13:21 GMT.
Zanganeh added that the country will keep pursuing its production objectives despite oversupply concerns, in order to recover to pre-sanctions output levels and regain the lost market share.
Saudi Arabia Oil official Ibrahim an-Naimi said that his country has no plans to cut output, as there are no reasons to think other countries will join the efforts to ease the overall glut. According to him, high-cost Oil producers should stop pumping and leave the market. He also noted that Saudi Oil production remains economic at $20/bbl, reports Bloomberg.
European indices demonstrate sustainable downward trend, because of cheap Oil. FTSE 100 declined by 1.42%, EuroStoxx 50 lost 2.14%, DAX is down by 2.37%, French CAC 40 lost 2.05%.
Asian indices also show risk-averse sentiments today, Nikkei 225 is down by 0.85%, TOPIX declined by 0.51%, Hang Seng lost 1,15%. Despite a spike in equity selloff across the board, Chinese Index CSI 300 managed to advance by 0.65% today on government efforts to ease the panic on stock market.
US Consumer Confidence reports fell short of expectations, showing 92.2 points instead of 97.3 expected. US Crude inventories report, which should be released today, will pave the way for Oil prices, worsening the panic, or causing temporary rebound. The main outlook on Oil remains bearish, as fundamentals fail to give bullish impulse to this particular commodity price.
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